Retail giant Target is cracking down on
suppliers as part of a multi-billion-dollar overhaul to speed up its supply
chain and better compete with rivals including Walmart and Amazon.
The sixth-largest U.S. retailer by sales
plans to tighten deadlines for deliveries to its warehouses, hike fines
for late deliveries, and could institute penalties of up to $10,000 for
inaccuracies in product information, according to a letter sent to suppliers
recently.
The new rules and penalties are detailed in a
letter sent to suppliers. They will start to take effect on May 30 and will be
rolled out over the next 60-90 days. In the letter to suppliers, Target said
the goal was to keep products stocked to help eliminate out of stock situations
and therefore missed sales. The new rules, detailed in the letter, call for
domestic suppliers to give a single-day arrival date for shipments to Target's
warehouses. Domestic suppliers constitute the majority of Target's vendor base.
These suppliers will no longer have a
"grace period" to ship a few days after the promised date without
penalties, the letter says. Suppliers said the current grace period for
shipments is two to 12 days depending on product category. Target will also
hike fines on late shipments to 5 percent of the order cost, according to the
letter, which adds that the retailer is considering "escalating charges of
$5,000-$10,000" for suppliers who fail to provide complete and accurate product
information.
Household, paper, pet products and
center-store grocery suppliers have to comply with the rules in June; health
and beauty vendors in July and divisions including apparel, home and
electronics in August.
If your organization would like help to meet
Target’s new rules and deadlines, please contact B2BGateway today on +1 401 491
9595 or email Sales@B2BGateway.Net
